. . . And Isn’t Likely to Volunteer
“Fake it till you make it.”
—Career advice to newbie real estate agents.
In a hyper-competitive field where sales bluster is an ever-present temptation, real estate agents aren’t exactly the type to betray ignorance or confess a lack of confidence.
And even consummate Realtors with years of experience can’t predict the future, any more than Wall Street analysts, economists, or politicians can.
Which is why no agent is likely to publish a tell-all with these four confessions:
One. “I don’t know who’s going to buy your home.”
Combine a highly fragmented market and a big metro area, and there are literally hundreds of active, local real estate agents (out of something like 10,000 licensed Twin Cities Realtors) who could potentially bring the Buyer for any given listing (Note: which agents are likely to show a given home is easier to predict).
It wasn’t until after a decade selling homes that I worked on a transaction with the same agent twice (interestingly, I’ve since had repeat deals with several agents).
Which means that something like +95% of the time, the agent on the opposite side of the deal (if not their broker) will be unfamiliar.
That said, Buyers not infrequently resemble Sellers ” or at least, their Seller once upon a time, when they bought the home. That includes things like their life stage (single, starting a family, downsizing); socioeconomic status (lower middle class, upper middle class, etc.); and education.
Call that the Buyer’s likely demographic profile, which is important for the listing agent to know.
Two. “I don’t know how much your home is going to sell for.”
Sure, sure, good agents are (very) familiar with the Comp’s (“Comparable Sold Properties”), and what they suggest a given home is worth.
But, that’s just a range.
Especially when a home is unique and has few obvious peers, how much any given Buyer will pony up for it is an educated guess.
And for truly one-of-a-kind trophy properties, fair market value is . . . whatever the Buyer and Seller (and maybe Appraiser) agree it is.
Another unknown affecting the ultimate sales price: any material surprises about the home that come to light during the Buyer’s inspection, thereby reducing its value (if not nixing the deal).
Realtor Candor ” Cont.
Which leads directly to Confession #3: “I don’t know how long it’s going to take.”
The more expensive the home, the longer the expected market time.
That’s about all any agent can confidently tell a prospective Seller.
The home owner/client can certainly influence market time: price something low enough, and anyone can get you a deal by midnight tonight.
[Note: even ” make that ” especially then, sellers still want an expert agent, to maximize what they get, then make sure they actually get it, i.e., the sale closes.]
Conversely, overprice a home by enough, and it will never sell.
But, the days on market for even a well-priced, well-marketed home can vary significantly from what the averages suggest, even after taking account of local market conditions, time of year, etc.
Four. “Luck and timing are a big factor.”
Which East coast executive just got transferred to the Twin Cities, and suddenly needs to close on an upper bracket Minnetonka home by Labor Day; a sudden drop or spike in interest rates; whether the neighborhood is full of “For Sale” homes, or is starved for inventory.
Those are all things that affect the fate of an individual listing ” and which no one has control over.
At most, housing market participants can opt to sit on the sidelines when prices are inordinately low (Sellers) or high (Buyers).
So, given all those limitations, why hire a Realtor?
Because the stuff they don’t know . . . no one knows.
And because agents still know a lot more than Sellers do about the housing market, and the process of buying/selling a home.
Which means that they can save them time and make them money, leaving them better off, net of commission, than if they were to go it alone.